1. Playing it too safe

Did you know that Australians have some of the highest life expectancies globally? ABS data* shows that the life expectancy from birth is 85.3 years for females and 81.2 years for males. And that doesn’t consider the scientific and medical breakthroughs that may occur during your lifetime.

How is this relevant to your super? Well, if you got your first job at age 16, that means some of your super could be invested for 50 or more years, before retirement, and another 30 years after that! 

TelstraSuper Chief Investment Officer Graeme Miller says that longer life expectancy – coupled with more people choosing to work later in life – means young members will generally benefit from relatively high exposure to growth assets, rather than playing it too ‘safe’, in the early stages of their super journey. 

“Growth assets target greater returns over the long term, in return for a higher level of risk,” says Mr Miller, who adds that younger members have plenty of time on their side to ride out the ups and downs of more volatile investments.

Funds like TelstraSuper, which offer a MySuper Lifecycle strategy, typically design this strategy so that your super is exposed to the level of risk and return considered most appropriate for your age. In TelstraSuper’s case, young members under age 50 are automatically invested in our Growth investment option, unless they choose otherwise.  

The Fund also offers a “High Growth” investment option that might appeal to members who are prepared to take on even more investment risk. 

Importantly, both the High Growth and Growth investment options invest and spread risk across a diverse range of assets. 

“Investing in a diversified high growth option early can help you grow your super without the risk of putting everything into a single asset class such as shares,” says Mr Miller. “You can then slowly reduce the amount of risk you take on as you get closer to retirement – keeping in mind that even once a member starts retirement their super often remains invested for many years.” 

DISCOVER HIGH GROWTH

2. Multiple accounts

Had a few different jobs over the years? Or maybe you just aren’t sure where your super is (or if you even have any). You may have multiple super accounts, and that means you’re probably paying multiple sets of fees, which can eat into your super savings. 

Over the years, that can add up and impact the money you have for your retirement.

TelstraSuper Chief Customer Officer Tim Anderson says there are a number of ways you can locate and combine super multiple accounts, including via the MyGov website. 

 “From there you can combine them into one account with the click of a button if you wish,” says Mr Anderson. 

Alternatively, most super funds, including TelstraSuper, can help their members combine their super funds either online or provide some assistance on how to do it over the phone. 

“Super fund fees across multiple accounts could be a few hundred dollars a year,” says Mr Anderson. “That’s money that could be earning compound interest for your future.” 

COMBINE YOUR SUPER ACCOUNTS

3. Missing out on tax breaks

Super is one of the most tax-effective investments you can make. Making before tax (called concessional) contributions to your super can not only boost your super savings, but, in many cases, can reduce the amount of tax you pay. 

For example, someone earning $85,000 a year could put in an extra $50 a fortnight. This could boost their super by $1,105 but only reduce their take home pay by $851. The extra $251 is the tax saving that can go straight into super.

TelstraSuper Financial Planning Executive General Manager, Melinda Huggins, says knowing the numbers is key.

“Adding extra to your super could reduce your taxable income which means the more you earn, the more attractive it can be,” she says. “Many super funds – such as TelstraSuper – can help you do the numbers to see the impact it can have on your income, super balance and tax.”  

It’s also important to note that limits apply to how much money you can put into super each year. 

SPEAK WITH A FINANCIAL ADVISER

Want to get your super set up for the future?

You can access simple advice about your TelstraSuper account over the phone at no additional cost – it’s part of TelstraSuper membership. Plus, TelstraSuper is open to everyone, so you can join today. Simply give us a call on 1300 033 166 to find out more.

*ABS Life Expectancy (2020-2022) published 8/1//2023